On August 31, 2017, a Texas Federal Judge struck down the new Overtime Rule that was passed during the Obama administration, and subsequently challenged by 21 states and additional business groups. Judge Amos Mazzant ruled that the salary test as defined by the Department of Labor (DOL) did not meet the intended guidelines regarding the overtime rule.
The new overtime rule was set to create overtime pay for any workers who fell under the threshold of $47,476. The court ruled that creating overtime for workers who fell under the salary threshold without regard to their duties or job functions.
Employees whose duties were primarily those of executive, administrative, or professional (EAP) pass the duties test, which is one of the requirements for exempt status. In addition, the employee must be paid a salary and not be an hourly employee. Under the current rules, the employee must also be paid at least $23,660 annually.
In other words, workers who should have qualified for exempt status under the duties test would be eligible for overtime simply because they fell under the salary threshold issued by the DOL.
The Court’s opinion ruled that Congress did not intend the EAP rule to exclude the duties test and base exemption solely on salary level.
Lastly, the Court also determined that the new Overtime Rule did overreach the DOL’s authority by making the salary test the primary determination for exempt status.
Although employers won’t need to worry about employee’s salary for new overtime rules, they should still be aware that the Department of Labor issued a Request for Information (RFI). An RFI is the first step in the process of issuing new rules regarding the Overtime Rule. Employers can respond to the RFI if they would like to have input into the changes the DOL is considering implementing.
Let SwipeClock Help
Businesses still have to monitor the Department of Labor and the future changes to the overtime rule. In addition, entreprenuers must be aware of local and state employment laws. including local FMLA, sick leave, and scheduling laws.
Additionally, these businesses have to also comply with national laws such as Federal Overtime Laws, the Family Medical Leave Act and any other national or local laws that are enacted. SwipeClock provides a comprehensive array of workforce management and time tracking tools that can help businesses to more easily stay in compliance with local and national laws.
Records are effortlessly kept for years and accrual is automatically tracked and reported to employees according the state and city laws. Additionally, with geo-timekeeping clocks, businesses can effortlessly track time worked in specific cities to ensure compliance.
SwipeClock is a leading provider of cloud-based integrated workforce management solutions that include automated time and attendance, advanced scheduling, and leave management capabilities.
The company’s products, including TimeWorksPlus, TimeSimplicity and Workforce Management Clock enable employers to manage their most important and expensive asset-employees-by transforming labor from a cost of doing business to a competitive advantage.
SwipeClock’s workforce management solutions are sold through over 850 partners that empower more than 26,000 businesses to lower labor costs, comply with regulatory mandates, and maximize their profits. For more information, please visit www.swipeclock.com.
Written by Annemaria Duran. Last updated on September 9, 2017